[Federal Register Volume 59, Number 160 (Friday, August 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20455]


[[Page Unknown]]

[Federal Register: August 19, 1994]


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DEPARTMENT OF COMMERCE
[A-351-806]

 

Silicon Metal From Brazil; Final Results of Antidumping Duty 
Administrative Review

AGENCY: International Trade Administration/Import Administration, 
Commerce.

ACTION: Notice of final results of antidumping duty administrative 
review.

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SUMMARY: On August 5, 1993, the Department of Commerce published the 
preliminary results of its administrative review of the antidumping 
duty order on silicon metal from Brazil. The review period is March 29, 
1991 through June 30, 1992. The review covers four manufacturers/
exporters.
    We gave interested parties an opportunity to comment on the 
preliminary results. Based on our analysis of the comments received, we 
have changed our results from those presented in our preliminary 
results as described below in the comments section of this notice.

EFFECTIVE DATE: August 19, 1994.

FOR FURTHER INFORMATION CONTACT: Michael Heaney, Office of Antidumping 
Compliance, International Trade Administration, U.S. Department of 
Commerce, Washington, D.C. 20230; telephone (202) 482-4475.

SUPPLEMENTARY INFORMATION:

Background

    On August 5, 1993, the Department of Commerce (the Department) 
published in the Federal Register (58 FR 41721) the preliminary results 
of its administrative review of the antidumping duty order on silicon 
metal from Brazil (July 12, 1991, 56 FR 36135). The Department has now 
completed that administrative review in accordance with Section 751 of 
the Tariff Act of 1930, as amended (the Tariff Act).

Scope of the Review

    The merchandise covered by this review is silicon metal containing 
at least 96.00 but less than 99.99 percent of silicon metal from 
Brazil. Silicon metal is currently provided for under subheadings 
2804.69.10 and 2804.69.50 of the Harmonized Tariff Schedule (HTS) as a 
chemical product, but is commonly referred to as a metal. Semiconductor 
grade silicon metal (silicon metal containing by weight not less than 
99.99 percent of silicon and provided for in subheading 2804.61.00 of 
the HTS) is not subject to the order. HTS item numbers are provided for 
convenience and Customs purposes. The written description remains 
dispositive.
    On February 3, 1993 the Department determined, pursuant to 19 CFR 
353.29 (1993), that silicon metal with a higher aluminum content 
containing between 89 and 96 percent of silicon metal is of the same 
class or kind of merchandise as silicon metal subject to the 
antidumping duty order. While this scope determination was undertaken 
in the context of the antidumping duty order governing silicon metal 
from the People's Republic of China, the silicon metal subject to that 
order is the same as the silicon metal covered by this order. 
Therefore, the Department will include such merchandise in future 
reviews of this order.
    This review covers four manufacturers/exporters of Brazilian 
silicon metal. The period covered by this review is March 29, 1991 
through June 30, 1992.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results as provided by section 353.22(c) of the 
Department's regulations. We received comments from the petitioners 
(American Alloys, Inc., Elkham Metals Company, Globe Metallurgical 
Inc., SKW Metals & Alloys, Inc. and SMI Group, Inc., Rock Island 
Silicon Division) and from four respondents (Companhia Brasileira 
Carbureto de Calcio (CBCC), Companhia Ferroligas Minas Gerais-
Minasligas (Minasligas), Eletrosilex Belo Horizonte (Eletrosilex), and 
Rima Eletrometalurgia S.A. (Rima)). On January 14, 1994, we held a 
public hearing.
    Comment 1: Petitioners contend that CBCC refused to provide cost 
information necessary for the calculation of cost of production (COP) 
and constructed value (CV). Specifically, petitioners argue that CBCC 
did not properly report its interest expenses and charcoal replacement 
costs. Petitioners also contend that CBCC understated its electricity 
and quartz replacement costs. Petitioners conclude that the Department 
should utilize the highest, most adverse margin as best information 
available (BIA) since the deficiencies in CBCC's COP/CV response are so 
pervasive.
    Department's Position: We disagree with petitioners. While during 
verification we did find areas where the costs were not appropriately 
quantified, we have not found these deficiencies to be so significant 
or pervasive as to call into question the accuracy of the entire 
response. It should be noted that some of the issues, as discussed in 
comments 2, 4, 6, and 11, are related to methodological questions, 
rather than areas of incorrect reporting of costs. In the instances 
where we found insufficient verification support (see December 20, 1993 
``CBCC Cost Verification Report''), we relied on partial BIA. For the 
methodological issues, we recalculated the costs to correct a 
particular cost element. Although we have made certain adjustments to 
the information submitted by CBCC (see e.g., our responses to comments 
2, 4, 5, 6, 7, and 9), we generally have used CBCC's data in reaching 
these final results of administrative review.
    Comment 2: Petitioners note that Solvay do Brasil owns 99.8 percent 
of CBCC. Petitioners contend that if the Department uses the COP/CV 
information submitted by CBCC, it should base its calculation of 
interest expense upon the borrowing experience associated with the 
consolidated group of companies. Petitioners contend that the 
Department should use the financial expenses reported on Solvay do 
Brasil's financial statements to perform this calculation. Finally, 
petitioners assert that the Department should apply this allocation to 
the replacement cost of manufacture (COM) to properly account for 
Brazilian hyperinflation.
    CBCC argues that calculation of interest expense on a consolidated 
basis would be improper. CBCC contends that the December 20, 1993, 
verification report concludes that CBCC made interest-free loans to 
Solvay do Brasil. CBCC contends that it charged Solvay do Brasil the 
minimum Brazilian statutory requirement for the monetary correction. 
CBCC also argues that the Department found no evidence of loans from 
Solvay do Brasil to CBCC at verification.
    Department's Position: We agree with petitioners that CBCC's 
interest expense should be calculated on a consolidated basis. Since 
the cost of capital is fungible, we believe that calculating interest 
expense based on consolidated statements is the most appropriate 
methodology (see, e.g., Final Determination of Sales at Less Than Fair 
Value, Small Business Telephones from Korea, 54 FR 53141, 53149 
(December 27, 1989), Final Results of Antidumping Duty Administrative 
Review, Brass Sheet and Strip from Canada, 55 FR 31414, 31418-31419 
(August 2, 1990), and Final Determination of Sales at Less Than Fair 
Value, Antifriction Bearings (Other than Tapered Roller Bearings) and 
Parts Thereof from the Federal Republic of Germany, et al., 54 FR 
18992, 19074 (May 3, 1989)).
    In order to extinguish its outstanding debt, CBCC issued new shares 
of capital stock to its parent company. Also, we established at 
verification that Solvay do Brasil owns 99.8 percent of CBCC. Based on 
these facts, it is evident that the shift in debt is due to the parent 
company's control over the subsidiary. Accordingly, the degree of 
relationship influenced the structure of debt for the entire company. 
Therefore, consistent with our normal practice, we revised CBCC's 
submitted interest expenses based on the consolidated financial 
statements of Solvay do Brasil.
    During verification, CBCC company officials did not provide the 
source documents for Solvay's financial income and expenses. Therefore, 
we have used BIA to determine CBCC's financial expenses. As BIA, we 
used information from Solvay do Brasil's financial statements. This 
percentage was then applied to each month's COM to ensure that CBCC's 
COP data fully reflected interest expenses.
    Comment 3: Petitioners contend that the Department's December 20, 
1993, COP verification report suggested allocating interest expenses to 
CBCC's COP based on the sum of the financial expenses reflected in 
CBCC's and Solvay do Brasil's 1991 and 1992 financial statements. 
Petitioners note that if the Department took that approach, it would 
determine interest expenses as a percentage of the sum of both 
companies' cost of goods sold (COGS), adjusted for intercompany 
interest transactions. Petitioners further contend that CBCC's 
financial statements reflect only net interest expenses, and that use 
of the allocation that the Department proposed in its December 20, 
1993, verification report would give CBCC credit for all of its 
interest income, whether short-term or not. Petitioners argue that CBCC 
submitted no information regarding short-term interest income, making 
it impossible for the Department to make any adjustment for 
intercompany interest transactions.
    Department's Position: We agree with petitioners that CBCC did not 
provide information documenting the company's short-term interest 
income. As previously discussed in our response to Comment 2, we have 
relied upon BIA in our calculation of CBCC's interest expense. As BIA, 
we used the financial expense information from Solvay do Brasil's 
financial statements. We then applied this percentage to each month's 
COM for purposes of our COP/CV calculations.
    Comment 4: Petitioners assert that CBCC purchased electricity at a 
discount when the electricity is used to restart idled machinery. 
Petitioners note that, prior to March 1992, CBCC averaged the cost of 
electricity obtained from its own production and from three separate 
pricing plans. Petitioners note that, after March 1992, CBCC stopped 
averaging electricity costs, and used the discounted electricity 
associated with the running of idled machines. Petitioners contend that 
the Department should use CBCC's average electricity costs in the COP/
CV calculations rather than the discounted electricity costs associated 
with the restarting of idled machinery.
    CBCC contends that the antidumping law contemplates that producers 
will base pricing decisions on currently available COP information. 
CBCC contends that the Department verified that the furnace was idle 
prior to the acquisition of the discounted energy, and that the 
discounted energy was only used on the restarted furnace. CBCC argues 
that it applied the discounted energy to silicon metal so as to 
minimize the COP of silicon metal consistent with the Department's COP 
methodology. CBCC suggests that averaging its electricity costs would 
result in rejection of its cost data simply because the cost is not 
high enough.
    Department's Position: In reaching these final results we have 
relied upon our general practice in a hyperinflationary economy which 
is to calculate a monthly average cost for each input. The Department 
believes that it is inappropriate to specifically identify inputs 
obtained at a lower cost to a particular product or production run. The 
furnaces used to produce silicon metal can produce other products that 
are not subject to review. Likewise, other furnaces used to produce 
non-subject merchandise can be used to produce silicon metal. 
Accordingly, any benefits derived from the use of a particular furnace 
relate to all products produced during the period of review.
    We note that in this case it is strictly a management decision as 
to which product will be made in the furnace which is receiving the 
less expensive input. As such, in months in which there were U.S. 
shipments of silicon metal, the furnace which utilizes less expensive 
electricity can be assigned to produce silicon metal. That same furnace 
could be assigned to produce ferrosilicon in months in which CBCC had 
U.S. sales of ferrosilicon, a product which is also subject to an 
antidumping duty order. In fact, during the period covered by this 
review, the furnace in question did produce both silicon metal and 
ferrosilicon. (Both silicon metal and ferrosilicon were also produced 
in other furnaces.)
    The facts of the instant case are consistent with the Department's 
position requiring the weight-averaging of the costs of merchandise 
produced in more than one facility. The Department has consistently 
held that it is inappropriate to make adjustments for cost differences 
between facilities when the merchandise produced in each is identical 
(see Department of Commerce Policy Bulletin No. 92.2, July 29, 1992, 
which is on file at the Central Records Unit).
    Comment 5: Petitioners contend that the Department verified that on 
several occasions CBCC paid an advance deposit on its electricity bill. 
Petitioners further contend that the Department should make an upward 
adjustment to CBCC's reported electricity costs to account for the 
effect of Brazilian inflation.
    CBCC argues that it received a credit from CEMIG (its energy 
supplier) for advance payment. CBCC asserts that the Department should 
deduct the amount of the credit from the invoiced amount since that 
represents the real ``cost'' of the item.
    Department's Position: In calculating the replacement cost of 
electricity obtained in each month of the period of review we used the 
invoiced price for that month. We did not reduce the invoiced amount 
for the effect of any ``credits'' CBCC may have obtained. Such a 
reduction would not properly reflect the replacement cost of 
electricity. Although this is a short-term monetary asset which is not 
subject to the balance sheet monetary corrections, through agreement, 
CEMIG credits CBCC for the value of cruzeiros as of the invoice date. 
This does not reduce the replacement cost of electricity CBCC obtained 
but merely reduces the nominal cruzeiro amount outstanding. Under the 
Department's replacement cost methodology each month's cost is measured 
in the monthly nominal invoiced cruzeiro amounts. Therefore, we have 
accepted the amounts billed by CEMIG as each month's replacement cost, 
without the effect of the ``credit.''
    Comment 6: Petitioners note that CBCC reported electricity costs 
exclusive of the ICMS tax in its calculation of third-country COP. 
Petitioners contend that these tax payments should have been included 
in CBCC's calculation of electricity costs.
    Department's Position: We agree with petitioner. When using third-
country sales as the basis of FMV, we must determine if the 
manufacturer incurred costs which resulted from the payment of taxes on 
the purchase of inputs. In this review period, CBCC incurred ICMS tax, 
a value added tax (``VAT''), in purchasing electricity. CBCC is able to 
offset some of this tax when it sells products in the home market 
because it charges and receives a VAT on its home market sales. In this 
case, even though the home market was not viable, CBCC did make some 
home market sales. However, there were not enough home market sales for 
the VAT charged and received on those sales to offset all of the VAT it 
paid on the electricity purchased to produce the merchandise sold in 
the third country. Accordingly, this resulted in a net cost to CBCC for 
the ICMS taxes paid in the production of silicon metal sold for export. 
As such, the Department included the net amount of the ICMS VAT in the 
submitted COP and CV amounts.
    This approach differs from that used in the Department's remand 
determination concerning the underlying investigation. In that 
determination, we made an allowance for an offset to the ICMS VAT paid 
currently for potential VAT to be received on future home market sales. 
Under this approach the ICMS was, in effect, excluded from the 
calculation of constructed value. We have subsequently reconsidered 
this methodology and have concluded that allowing such an offset for 
potential, future sales results in an adjustment that we now consider 
to be purely speculative. Accordingly, we will include in CV ICMS on 
inputs that are not offset by VAT charged and collected on actual home 
market sales which occur during the period of review. We believe our 
current approach better reflects the economic reality of the costs 
incurred during the period of review (i.e. current costs are not tied 
to potential future events). Our approach in this case is consistent 
with the Final Determination of Sales at Less Than Fair Value, 
Ferrosilicon from Brazil, 59 FR 732, 737 (January 6, 1994). We believe 
this approach also is in accordance with the court's remand 
instructions on this issue in Camargo Correa Metais, S.A. v. United 
States, Slip. Op. 93-163 (CIT August 12, 1993).
    Comment 7: Petitioners contend that CBCC made no provision in its 
calculation of charcoal costs for the effects of inflation when CBCC 
harvested an area. Petitioners note that the Department requested 
additional documentation from CBCC at verification regarding CBCC's 
estimates of charcoal harvest and the other assumptions CBCC built into 
its calculation of charcoal cost. Petitioners contend that, because 
CBCC failed to provide information, the Department should apply BIA. 
Petitioners argue that use of BIA is appropriate when a respondent 
refuses to submit information after being asked to do so, and where the 
refusal to provide the requested information impedes the Department's 
proceeding.
    Petitioners contend that CBCC's failure to provide the appropriate 
information justifies the use of noncooperative BIA for CBCC. Finally, 
if the Department determines not to use noncooperative BIA for CBCC, 
petitioners suggest that the Department adjust CBCC's reported cost for 
company-produced charcoal upward to an amount equal to that charged to 
CBCC from unrelated suppliers.
    Department's Position: We agree with petitioners that we should 
adjust CBCC's charcoal replacement costs. However, we disagree that 
CBCC was noncooperative and should receive a margin based solely upon 
BIA. We discovered errors made by CBCC when it calculated its cost of 
producing charcoal, a primary raw material used in the production of 
silicon metal. For purposes of calculating replacement costs, CBCC 
substantially understated its cost of producing charcoal by 
inaccurately recording the costs associated with its forests which 
provide the raw material needed to produce charcoal. We note, however, 
that CBCC reported cost information consistent with that which is 
maintained in its normal cost accounting system. Therefore, we have 
recalculated the cost of CBCC's production of charcoal. We relied upon 
the actual weighted-average monthly cost CBCC was charged by unrelated 
vendors.
    Comment 8: Petitioners argue that the Department should revise 
CBCC's reported 1992 quartz replacement costs upward to account for the 
more costly delivery charges the Department discovered at verification.
    Department's Position: At verification we noted that CBCC changed 
procedures for quartz purchasing in 1992. Because we found that CBCC's 
reported quartz replacement costs for 1992 did not reflect the entire 
cost of the material, we randomly chose May 1992 as a sample to 
determine the amount of the discrepancy. In establishing the amount of 
the discrepancy, we valued all quartz purchases received in May at the 
delivered price in effect for the region of origin. This reconciliation 
indicated that CBCC's estimate of delivery charges for this month 
understated the per ton cost for quartz by approximately four percent. 
Because CBCC did not fully report its quartz replacement costs, we have 
applied partial BIA for this material. As BIA, we have adjusted upward 
the reported quartz prices reported for January through May 1992 by 
four percent.
    Comment 9: Petitioners contend that CBCC's calculation of inventory 
holding gains/losses is flawed. Petitioners note that there is a large 
difference between the amount of silicon metal produced by CBCC and the 
amount of silicon metal sold by CBCC. Petitioners also object to the 
limited data provided by CBCC for electrode paste and charcoal and 
argue that CBCC's inclusion of a large year-end depreciation charge in 
December 1991 resulted in significantly understated COPs for all but 
one month of the review period.
    Petitioners assert that, by using sales and production data 
provided by CBCC, petitioners have derived a corrected inventory 
holding gain/loss calculation for CBCC. Petitioners contend that the 
Department should use petitioners' revised calculation of CBCC's 
inventory holding gains/losses in the final results.
    Department's Position: We have reviewed CBCC's calculation of 
inventory holding gains/losses (see CBCC's February 24, 1993 submission 
at Exhibit A) and have found certain inconsistencies which render that 
calculation unacceptable. For certain months CBCC reported sales and 
shipments of silicon metal but showed no removal of silicon metal from 
inventory. In other months, the tonnage of silicon metal removed from 
inventory was either much less or much greater than the amount of 
merchandise that CBCC reported in its sales listings.
    Moreover, we find that petitioners' ``corrected'' calculation of 
CBCC's inventory gains/losses is also unacceptable since it fails to 
account for finished silicon metal consumed in the production of other 
products. Accordingly, we have rejected both CBCC's and petitioners' 
calculation of inventory gains/losses, and have removed this item from 
our COP/CV calculations, which has the effect of increasing COP/CV.
    Comment 10: Petitioners argue that the Department should make an 
addition to CBCC's COP to account for certain costs (power, secondary 
materials and crushing costs) which CBCC omitted from CBCC's revised 
COP/CV calculation. Petitioners note that these expenses were included 
in CBCC's original COP/CV response.
    CBCC contends that power, secondary materials and crushing costs 
were included in its revised response under the variable ``VARCOM.'' 
CBCC argues that it summarized these three costs in order to comply 
with the Department's reporting requirements.
    Department's Position: Although the power, secondary materials and 
crushing costs were not detailed in CBCC's revised COP/CV calculations, 
the total reported costs furnished by CBCC (variables ``TOTCOP'' and 
``TOTCV'') did include these expenses. CBCC did omit these items from 
the variables representing variable overhead, fixed overhead, and total 
variable cost of manufacturing, i.e., variables ``VARFOH'', ``FIXFOH'', 
and ``TOTCOM''. However, since CBCC included these expenses in its 
calculation of total COM, no adjustment to CBCC's reported COP or CV is 
required.
    Comment 11:  Petitioners contend the Department should reject 
CBCC's allocation of general and administrative (G&A) and selling 
expenses. (CBCC allocated these expenses to individual products using 
the ratio of each product's cost of goods sold (COGS).) Petitioners 
contend that the Department should follow its established practice and 
allocate these expenses to total COGS, as the Department did in the 
preliminary results of this review.
    CBCC suggests that the allocation of G&A and selling expenses used 
in the Department's preliminary calculations results in a systematic 
overstatement of these expenses. CBCC argues that the Department should 
allocate the ratio of G&A and selling expenses by the historical ratio 
of these expenses to historical COM. CBCC notes that the Department 
followed this methodology in the redetermination of the original 
investigation for this proceeding (see Silicon Metal from Brazil: 
Preliminary Determination on Remand, (November 17, 1993, at 5).
    Department's Position: G&A expenses are period expenses which are 
normally measured over a fiscal year. As such, the Department 
calculated G&A on an annual historical basis. In order to avoid 
overstating G&A expenses and to neutralize hyperinflationary effects, 
we applied the G&A ratio (i.e., the ratio of annual G&A expenses to 
cost of goods sold reflected in the financial statements) to each 
month's COM calculated on a historical basis. In addition, CBCC had 
failed to include Solvay do Brasil's G&A expenses. Therefore, we 
applied a portion of Solvay do Brasil's G&A in the final calculation of 
these costs (see CBCC Calculation Adjustment Memorandum, February 2, 
1994). This is consistent with the method we used to calculate G&A 
expenses in the remand determination in the underlying investigation.
    Comment 12: Petitioners contend that the Department should include 
ICMS and IPI taxes in the calculation of CBCC's raw material costs. 
Petitioners contend that these taxes are included on home market sales, 
and must, therefore, be included in the COP of home market merchandise.
    Department's Position: Petitioners' argument that ICMS and IPI 
taxes are included on home market sales is not relevant since CBCC's 
home market sales were insufficient to form a basis for FMV and, 
therefore, FMV was based upon third country sales. However, we agree 
that, since the ICMS and IPI taxes resulted in a net cost to CBCC, the 
Department should include this net amount of ICMS and IPI in the 
submitted COP and CV amounts. Our reasoning for doing so is discussed 
further in our response to comment 6, which involved a similar 
situation.
    Comment 13: Petitioners argue that the Department failed to include 
CBCC's and Minasligas's imputed credit expenses in the preliminary CV 
calculations. Petitioners argue that the Department should make an 
adjustment for imputed credit in the final calculations.
    Department's Position: We agree with petitioners. In these final 
results we have included CBCC's and Minasligas's imputed credit costs 
in our calculation of CV. We based this adjustment on the credit 
expenses that these companies incurred on home market or third-country 
sales.
    Comment 14: Petitioners contend that the Department should use the 
quartz replacement costs reported by Minasligas in its original COP/CV 
response rather than the costs reported in Minasligas's revised 
response of November 9, 1993. Minasligas provided average quartz 
delivery charges in its revised COP/CV response. Petitioners note that 
the Department's verification report indicates that averaging freight 
charges significantly understates Minasligas's type A quartz costs.
    Minasligas contends that, while the corrected cost data may result 
in lower delivered prices for type A quartz, the revised data result in 
significantly lower overall replacement costs for that material. 
Minasligas indicates that it does not object to use of the quartz 
replacement costs reported in its original COP/CV response, and notes 
that the Department used these costs in the preliminary calculations.
    Department's Position: We agree with petitioners. As discussed in 
the cost verification report (December 17, 1993), the revised costs 
calculated by Minasligas and filed with the Department on November 9, 
1993 reflect a methodology which understates the delivered cost of type 
A quartz, by allocating the delivery charges among all quartz 
purchases. Accordingly, we have rejected the revised replacement cost 
for quartz and relied upon the cost information Minasligas reported in 
its original COP/CV response. As Minasligas notes, this is the 
information we used in reaching the preliminary results of review.
    Comment 15: Petitioners state that the Department determined at 
verification that Minasligas did not include forest amortization costs 
in its calculation of charcoal replacement costs. Petitioners argue 
that omission of these expenses significantly understates the cost of 
the charcoal which Minasligas produced. Petitioners contend that the 
Department should use the costs associated with Minasligas's purchase 
of charcoal from unrelated suppliers in the final calculation of 
charcoal replacement costs.
    Minasligas argues that the charcoal replacement costs it reported 
in its original COP/CV response were exclusively based on the delivered 
price charged to the company by suppliers cutting trees on land that 
Minasligas did not own. Minasligas contends that it pays less for 
charcoal cut from trees on its own land, and that its corrected 
charcoal costs are significantly lower than those reported in its 
original COP/CV response. Minasligas indicates that the Department 
should use the charcoal replacement costs reported in its original COP/
CV response, if the Department decides not to use the corrected 
charcoal replacement costs supplied by Minasligas.
    Department's Position: We agree with petitioners. As discussed in 
the cost verification report (December 17, 1993), the revised costs 
calculated by Minasligas and filed with the Department on November 9, 
1993 reflect a methodology which understates the replacement cost of 
charcoal by averaging the payment to subcontractors for charcoal 
obtained from company-owned land with the higher costs from unrelated 
charcoal vendors. This calculation does not include any cost to 
Minasligas for acquiring forests or planting and maintaining forests. 
Accordingly, we have rejected the revised replacement cost for charcoal 
and relied upon the cost information provided by Minasligas in its 
original COP/CV response.
    Comment 16: Petitioners contend that the Department found at 
verification that Minasligas had not accurately accounted for loss 
allowances for quartz and charcoal used in 1991 silicon metal 
production. Petitioners contend that the Department should make an 
upward adjustment to Minasligas's reported 1991 quartz and charcoal 
costs to account for this expense. Petitioners suggest that the 
Department use the loss allowances provided by Minasligas for 1992 
silicon metal production to make this adjustment.
    Minasligas contends that the question of whether quartz and 
charcoal losses were understated prior to 1992 is irrelevant because 
Minasligas had no U.S. sales during that time. Minasligas notes that it 
did provide an acceptable calculation for charcoal and quartz losses 
for 1992.
    Department's Position: We agree with the petitioners that, prior to 
1992, the measured consumption of charcoal and quartz into the furnace 
was not consistently and scientifically adjusted to reflect losses 
sustained between the time the material was delivered into the factory 
stockyard and introduced into a furnace. Beginning in 1992, Minasligas 
established a loss allowance and consistently applied it to both quartz 
and charcoal. For 1991 quartz and charcoal, Minasligas estimated loss 
allowances and recorded them on an occasional basis. We have 
recalculated loss allowances for 1991 based upon BIA. As BIA, we have 
used the loss allowance established by the company in 1992 and applied 
this percentage to both quartz and charcoal consumption for all months 
in 1991. We disagree with Minasligas's assertion that the 1991 costs 
are irrelevant, since they are used to determine whether home market 
sales were sold at or above their COP.
    Comment 17: Petitioners contend that the Department should allocate 
Minasligas's consumption of iron rods and tubes over all months of the 
period of review, instead of accepting Minasligas's approach. 
(Minasligas recognized the entire expense associated with these charges 
in the month in which they were requisitioned out of inventory.) 
Petitioners suggest that for those months for which Minasligas did not 
report iron rods and tube costs, the Department should use the per-unit 
output costs for rods and tubes from the most recent month with an 
adjustment for inflation.
    Minasligas contends that allocating the consumption of rods and 
tubes over the period of review would only marginally change the cost 
of materials for the month that Minasligas had a U.S. sale. Minasligas 
contends that more rods were requisitioned during that month than were 
consumed.
    Department's Position: We agree with petitioners that it is more 
accurate to allocate the number of rods and tubes removed from 
inventory to production tons over the period in which they were 
consumed, rather than just the month of requisition. Accordingly, we 
have reallocated the total rods and tubes consumed during the period of 
review equally to tons produced during this same time period. Each 
month's allocated consumption quantity was then valued at the reported 
replacement cost for that same month. We also agree with Minasligas 
that this adjustment does not have a serious impact on the reported 
cost information.
    Comment 18: Petitioners assert that verification revealed that 
Minasligas's supplier measures electricity from the fifth of one month 
to the fifth of the following month. Petitioners further argue that 
Minasligas used the invoice received from its supplier on approximately 
the tenth of the month to represent the electricity costs for that 
month. Petitioners contend that such a methodology understates the 
replacement costs for electricity since it primarily reflects the costs 
incurred during the previous month. Petitioners contend that for each 
month of the review period the Department should use the electricity 
costs reported by Minasligas for the following month.
    Department's Position: We agree with the petitioners. Minasligas 
reported the replacement cost of monthly electricity for the month in 
which the bill was received. Each month's bill reflects the cost of 
electricity purchased in the prior month. Therefore, the reported 
replacement cost of electricity is understated since it lags the actual 
cost by one month. We have corrected for this understatement by 
matching each month's bill with the month that it covered.
    Comment 19: Petitioners contend that Minasligas's allocation of G&A 
expenses is incorrect. (Minasligas allocated monthly G&A expenses to 
individual products based upon the number of furnaces used in the 
production of each product.) Petitioners contend that the Department 
should allocate G&A expenses to total COGS as was done in the 
preliminary results.
    Minasligas contends that a larger portion of its operation is 
devoted to ferrosilicon than to silicon metal. Minasligas contends that 
allocating G&A expenses to total COGS overstates the amount of G&A 
expenses relating to silicon metal.
    Department's Position: We agree with petitioners. G&A expenses are 
period expenses which relate to the operation of the company as a whole 
and are not customarily associated with a particular product or 
process. Therefore, we recalculated G&A expenses on a company-wide 
annual historical basis and, in order to avoid overstating G&A expenses 
and to neutralize hyperinflationary effects, we applied the G&A ratio 
to each month's COM calculated on a historical basis.
    Comment 20: Petitioners contend that the Department should 
calculate Minasligas's interest expense as the consolidated expenses of 
Minasligas and Delp Engenharia S.A. (Delp). Petitioners note that Delp 
controls over 93 percent of Minasligas's common stock and thus has a 
controlling interest in Minasligas. Petitioners suggest that the 
Department use Delp's 1991 and 1992 financial statements to perform 
this calculation.
    Minasligas contends that Delp and Minasligas are separate entities, 
maintain separate financial statements, and have their own interest 
expense and income. Therefore, Minasligas asserts that it would be 
improper to calculate interest expense on a consolidated basis.
    Department's Position: We agree with petitioners that Minasligas 
should report interest expense on a consolidated basis. See our 
response to comment 2.
    In the case of Minasligas, Delp does not consolidate its accounts 
with Minasligas. In addition, because there are no significant 
intercompany transactions between the two companies, we combined the 
financial expenses of the two companies and calculated an interest 
expense as a ratio to cost of sales, effectively creating consolidated 
accounts. The Department only allows income generated from investments 
of working capital, which the company documents as short-term in 
nature, to offset interest expense (see, e.g., Final Determination of 
Sales at Less Than Fair Value, Cellular Mobile Telephones from Japan, 
54 FR 45447, 45455 (October 31, 1985), and Final Determination of Sales 
at Less Than Fair Value, Mechanical Transfer Presses from Japan, 55 FR 
335, 342 (January 4, 1990)). Minasligas was able to substantiate only a 
portion of the investments to be short-term; consequently, we have 
allowed only the documented portion of interest income as an offset. We 
did not allow an offset to Minasligas's parent, Delp, for interest 
expense because the information required to substantiate such an 
adjustment is not contained in the record of this review.
    In order to avoid overstating financing charges, we applied the 
interest expense ratio (i.e., the ratio of net interest expense to cost 
of goods sold) to each month's COM calculated on a historical basis 
rather than to amounts computed under the replacement cost basis. This 
is consistent with the methodology used in the remand determination in 
the underlying investigation.
    Comment 21: Petitioners contend that Minasligas did not submit 
information regarding short-term interest income at the consolidated, 
parent company level. Accordingly, the petitioners contend that it is 
not feasible to ``compute interest expense using the sum of 
Minasligas's and Delp's financial expenses adjusted for intercompany 
interest transactions'', as suggested by the Department's cost 
verification report. Finally, petitioners assert that the Department 
should apply this allocation to COM to properly account for Brazilian 
hyperinflation.
    Department's Position: We agree with petitioners that the record 
does not contain information regarding short-term interest income at 
Minasligas's parent company, Delp. Accordingly, we have not allowed any 
such offset for Delp's interest income in our calculation of combined 
interest expense. Consistent with our practice in the Final 
Determination of Sales At Less Than Fair Value; Ferrosilicon from 
Brazil, 59 FR 732, 736-737, January 6, 1994, we have applied the 
calculated interest expense ratio to the monthly COMs calculated on a 
historical basis rather than amounts computed under the replacement 
cost basis.
    Comment 22: Petitioners contend that Minasligas's calculation of 
inventory holding gains/losses is flawed because Minasligas failed to 
properly ``layer'' inventory according to the month that the 
merchandise was placed in inventory. Petitioners contend that 
Minasligas's calculation reflects one level of inventory even though 
Minasligas held merchandise in inventory for at least two preceding 
months. Petitioners contend that this flaw makes Minasligas's 
calculation unusable. Accordingly, petitioners contend that the 
Department should disregard Minasligas's calculation, and make no 
adjustment for inventory holding gain or loss in the final COP 
calculations.
    Department's Position: We agree with petitioners. Minasligas's 
calculation of inventory holding gains/losses did not account for 
merchandise that spent multiple months in inventory. Accordingly, we 
have rejected Minasligas's claimed inventory holding gain.
    Comment 23: Petitioners contend that the Department should disallow 
the portion of Minasligas's duty drawback claim pertaining to IPI and 
ICMS taxes. Petitioners contend that these expenses are taxes, not 
duties. Petitioners also note that these two taxes were not listed in 
the duty drawback regulations provided by Minasligas.
    Department's Position: We disagree with petitioners. Article 314 of 
the Brazilian Customs Regulations provides for the ``suspension of 
payments of tributes due when importing merchandise to be exported * * 
*.'' (Emphasis added.) The suspension is not limited to customs duties. 
It includes all ``tributes'' paid upon importation of the merchandise. 
IPI and ICMS taxes incurred on imported electrodes are two such 
tributes which are suspended upon exportation of the merchandise. Thus, 
Minasligas correctly included these expenses in its claimed adjustment 
for duty drawback.
    Comment 24: Petitioners contend that the Department should use 
adverse, noncooperative BIA for RIMA. Petitioners make reference to the 
Department's December 22, 1993 verification report regarding RIMA's 
COP/CV response. That report indicated that RIMA: (1) Was unwilling to 
supply the Department with necessary worksheets, schedules, or source 
documents, (2) that the aspect of RIMA's COP/CV response pertaining to 
related party transactions, G&A expenses, finance costs, and profit 
were not verified, (3) that RIMA's calculation of charcoal and quartz 
costs were not reflective of monthly replacement costs, and (4) that 
RIMA did not adjust the value of its electrode purchases to account for 
inflation.
    Petitioners assert that the verification report indicates that RIMA 
based its cost response on a managerial cost accounting system that was 
not used for purposes of valuing inventory in the financial statements. 
As such, petitioners contend that RIMA's submitted cost information 
could not be reconciled with RIMA's financial statements. According to 
petitioners, the verification report also indicates that RIMA based its 
calculation of labor hours on theoretical times and that actual labor 
hours exceeded these theoretical hours by a significant amount. 
Finally, petitioners find that the Department determined that RIMA's 
COP response did not account for costs associated with write-downs or 
obsolescence.
    Petitioners contend that RIMA's refusal to provide requested 
information significantly impeded the completion of this review. In 
accordance with the Department's practice, petitioners argue that the 
Department should assign as BIA the higher of the highest prior margin 
established for any company or the highest margin determined in this 
administrative review.
    Department's Position: At verification we encountered serious and 
pervasive problems in our efforts to verify the information submitted 
by RIMA. We found that these problems were so extensive that we could 
not test major areas of the response. For those areas we tested, we 
found significant discrepancies in the amounts reported, in addition to 
a lack of sufficient data to corroborate the response. We outlined the 
major deficiencies that we found during verification in the public 
version of the cost verification report (December 22, 1993) and the 
RIMA calculation memorandum, both of which are on file in the Central 
Records Unit.
    Under these circumstances, the Department cannot properly base its 
determination on the information submitted by RIMA. The Department 
cannot be placed in the position of having to identify and perform 
numerous and substantial revisions to develop accurate cost data, if 
indeed such revisions were even possible in this case. As stated in 
Photo Albums and Filler Pages From Korea; Final Determination of Sales 
at Less Than Fair Value, 50 FR 43754, 43755-43756 (October 29, 1985):

    It is the obligation of respondents to provide an accurate and 
complete response prior to verification so that the Department may 
have the opportunity to analyze fully the information and other 
parties are able to review and comment on it. Verification is 
intended to establish the accuracy and completeness of a response 
rather than to supplement and reconstruct the information to fit the 
requirements of the Department.

    Therefore, for the reasons stated above, we have determined that 
rejection of the cost response submitted by RIMA is appropriate for 
these final results and is consistent with past practice (see, e.g., 
Final Determination of Sales at Less Than Fair Value; Antifriction 
Bearings (Other Than tapered Roller Bearings) and Parts Thereof from 
the Federal Republic of Germany, et al.., 54 FR 18992 (May 3, 1989), 
31704-31709, and Final Determination of Sales at Less Than Fair Value; 
Sweaters Wholly or in Chief Weight of Man-Made Fiber From Taiwan, 55 FR 
34586 (August 23, 1990, 34586-34587)).
    In accordance with section 776(c) of the Tariff Act, we use BIA in 
cases where a party refuses or is unable to produce information in a 
timely manner and in the form required. The Department generally uses a 
two-tiered approach in its choice of BIA. For uncooperative 
respondents, the Department uses the higher of: (1) The highest rate 
for any company from the original investigation or a prior 
administrative review, or (2) the highest rate found in the current 
review for any company. For respondents that attempt to cooperate, the 
Department uses the higher of: (1) The highest rate ever applicable to 
the firm for the subject merchandise, or (2) the highest calculated 
rate in the current review for any firm (see Antifriction Bearings 
(Other Than Tapered Roller Bearings) and Parts Thereof from France, et 
al., Final Results of Antidumping Duty Administrative Review, 58 FR 
39729, 39739, July 26, 1993).
    RIMA responded to our questionnaire and to each of our requests for 
supplemental information. Therefore, we have determined that RIMA 
attempted to cooperate, even though it was unable to substantiate much 
of the information contained in its COP/CV response. Since RIMA 
attempted to cooperate, we have applied a rate of 91.06 percent, the 
highest rate ever applicable to RIMA for the subject merchandise (see 
Silicon Metal from Brazil, Final Determination of Sales at Less Than 
Fair Value, 56 FR 26972, June 12, 1991).
    Comment 25: Petitioners contend that it is the Department's 
established practice to exclude from the dumping calculations sales 
that were sold during the review period but shipped outside the period 
of review. Because Eletrosilex's only sale was shipped after the close 
of this review period, petitioners argue that Eletrosilex had no sales 
subject to review for the current 1991-1992 administrative review. 
Petitioners contend that the Department should maintain the 91.06 
percent all others rate for Eletrosilex since this constitutes the most 
recent information available for Eletrosilex. Petitioners note that in 
Asahi Chemical Indus. Co., Ltd. v. United States, 585 F. Supp 1261, 
1267 (CIT 1982), the CIT held that when there were no shipments during 
the period of review, the Department uses the most recent information 
to determine margins.
    Department's Position: We disagree. Section 353.22(b) of our 
regulations stipulates that administrative reviews ``normally will 
cover, as appropriate, entries or sales of the merchandise during the 
12 months immediately preceding the most recent anniversary month.''
    We based this review upon sales because (1) the selling price and 
each of the expenses associated with this sale were known by 
Eletrosilex and reported to the Department at an early stage of the 
review process, and (2) use of this sale in our margin calculations 
constitutes the most accurate reflection of Eletrosilex's pricing 
practices during the review period. Moreover, we note that we have 
based some other administrative reviews upon sales rather than entries 
(see Portable Electric Typewriters from Japan, Final Results of 
Administrative Review, 56 FR 56393, 53697, November 4, 1991, and Gray 
Portland Cement and Clinker from Japan, Final Results of Administrative 
Review, 58 FR 48826, 48832, September 20, 1993). Finally, we note that 
the question addressed in Asahi was whether we could conduct an 
administrative review in the absence of exports, entries or sales 
during the period of review. In this case, Eletrosilex clearly had 
sales during the period of review.
    Comment 26: CBCC and RIMA contend that the Department violated the 
statute and the regulations by failing to publish the final results of 
review by July 31, 1993. CBCC and RIMA note that section 751(a)(1) of 
the Tariff Act stipulates that the Department will issue a final 
determination ``(A)t least once during each 12-month period'', and that 
Sec. 353.22(c)(7) of the regulations indicates that the Department will 
publish a final determination ``not later than 365 days after the 
anniversary month.''
    CBCC and RIMA contend that the Department abused its discretion by 
conducting a verification of sales and cost data since these 
verifications further delayed the issuance of the final results. CBCC 
and RIMA suggest that the final results should be based upon the record 
that existed on July 31, 1993, and that the record at that time 
indicated no dumping margins for either company.
    Department's Position: We disagree. The CIT has determined that the 
completion of administrative reviews within the one-year time period is 
``directory'' rather than ``mandatory'' (see Koyo Seiko Co., v. United 
States, 796 F. Supp. 517,523 (CIT 1992)). While we strive to complete 
administrative reviews within a year, the issuance of our final results 
is sometimes delayed by other regulatory and statutory requirements 
associated with the administration of the antidumping law.
    In this case, petitioners demonstrated that ``good cause'' existed 
for verification pursuant to 19 C.F.R. Sec. 353.22(c) and 353.36(a). 
Specifically, petitioners noted potential deficiencies in the 
replacement cost data provided by CBCC and RIMA. Because ``good cause'' 
existed for verification, our decision to verify the COP responses of 
CBCC and RIMA was appropriate.
    Comment 27: Minasligas indicates that it agrees with the statement 
in the Department's cost verification report (December 17, 1993) that 
an allocation of direct and indirect labor, maintenance, and other 
overhead items based upon production quantity would result in lower 
fabrication charges than those reported in its questionnaire response. 
(Minasligas allocated these charges on the number of furnaces in its 
COP/CV response.)
    Department's Position: Consistent with our finding in the Final 
Determination of Sales at Less Than Fair Value; Ferrosilicon from 
Brazil, 59 FR 732, 739, January 6, 1994, we have determined that the 
number of furnaces is not an adequate basis for allocating labor or 
other fabrication costs. The number of furnaces in a facility is an 
arbitrary measure which does not necessarily reflect the actual level 
of labor and overhead expended in the production of the subject 
merchandise. In the instant case, output tons is a more accurate 
allocation basis because these costs are directly related to production 
amounts. Therefore, we have revised the submitted costs to reflect an 
allocation based on actual production units.
    Comment 28: Eletrosilex contends that the Department incorrectly 
based its conversions of certain cruzeiro-denominated expenses (inland 
freight, port charges, ocean freight, warehousing, and packing) on the 
U.S. sale date. Eletrosilex argues that the Department's policy in 
countries with hyperinflationary economies is to base currency 
conversions on the date that the expenses were incurred. Eletrosilex 
requests that the Department follow this policy with respect to the 
conversion into dollars of the cruzeiro-denominated expenses outlined 
above.
    Department's Position: We agree. As is our standard practice in 
cases where the economy is hyperinflationary, we based our currency 
conversions on the date that the cost was incurred, rather than on the 
date of the U.S. sale (see Final Determination of Sales at Less Than 
Fair Value, Industrial Nitrocellulose from Yugoslavia (55 FR 34946, 
34949, August 27, 1990), and Final Determination of Sales at Less Than 
Fair Value, Oil Country Tubular Goods from Israel (52 FR 1511, 1513, 
January 14, 1987)). We have adjusted our final calculations for 
Eletrosilex accordingly.
    Comment 29: Eletrosilex contends that the allocation of G&A and 
selling expenses that the Department used in its preliminary results is 
improper because it does not accurately reflect Eletrosilex's 
experience as a silicon metal producer and seller during the period of 
review. Eletrosilex notes that the Department relied upon the 1991 
financial statement to perform this calculation, and that these 
financial statements do not fully reflect Eletrosilex's experience for 
the review period. Eletrosilex contends 1991 was an ``aberrational 
year'' in which it incurred G&A and selling expenses which were 
unrelated to the production of silicon metal.
    Eletrosilex indicates that on March 10, 1993, it submitted total 
G&A and selling expenses by month for every month included in the 
period of review. Eletrosilex urges the Department to derive G&A and 
selling expenses by summing all selling expenses and dividing the total 
amount of these expenses by the total COM that Eletrosilex reported for 
the period March 29, 1991 through June 30, 1992.
    Department's Position: As noted in our response to Comment 11, our 
current practice in cases in which the economy is hyperinflationary is 
to apply the G&A and selling expenses ratio to each month's COM 
calculated on a historical basis. We did not ask Eletrosilex to supply 
historical COM information in this review. Accordingly, as a reasonable 
alternative to our current practice, we have summed all selling 
expenses reported by Eletrosilex for the period of review, and divided 
this total amount by the total COM that Eletrosilex reported for the 
review period.
    Comment 30: RIMA contends that the Department's December 22, 1993 
COP/CV verification report incorrectly characterized its personnel as 
``unwilling'' to supply worksheets, schedules, and source documents. 
RIMA states that it cooperated with the verification team and that the 
difficulties encountered during the verification were due to: (1) The 
fact that the verification outline was not made available to RIMA until 
a week before commencement of the verification, (2) the company had 
never previously undergone a verification, (3) there had been a good 
deal of turnover in the company and the personnel responsible for the 
verification did not participate in the preparation of the response, 
and (4) the verification began on Saturday, continued through Sunday, 
and a Brazilian national holiday.
    Department's Position: We disagree with RIMA. RIMA's suggestion 
that the company's problems relate to having only one week of 
preparation time after receipt of the verification agenda is completely 
erroneous. The verification outline was in fact released to counsel for 
RIMA on October 28, 1993, and verification of RIMA's cost response 
began on November 13, 1993. Thus the agenda was available more than two 
weeks prior to the start of verification. Further, the verification 
agenda merely indicates the Department's approach to performing the 
verification. Any suggestion that the company did not realize the 
Department intended to review the underlying source documents is 
unsupported. The fact that the Department is particularly concerned 
with each company's methodology for linking the cost response to its 
cost and financial accounting system is indicated in the Department's 
questionnaire (September 1, 1992), which requires the company to 
provide detailed explanations of this connection. The questionnaire 
also instructed company personnel to contact the Department if for any 
reason they did not intend to rely on the company's cost accounting 
records to prepare the response (September 1, 1992 at page 53).
    RIMA's further assertions that the company's problems related to 
conducting verification on a weekend and a lack of verification 
experience are not persuasive. Company personnel and their counsel knew 
well in advance of the need to schedule verification time on the 
weekends; in fact, counsel for each of the respondents, including 
counsel for RIMA, provided input in setting the verification schedule 
for this case. It should also be noted that the Department's personnel 
conducting the verification noted no improvement in the company's 
ability to provide verification support as the verification progressed 
into the regular work week. Indeed we know of no reasons why it would 
improve on a particular day of the week since the information the 
Department requested should be available within the company, and all of 
the company personnel who participated in the verification were 
available on the weekend.
    It is not unusual for a respondent to be unfamiliar with the 
verification process and the Department does not expect such 
experience. However, if company personnel are unable to explain the 
methodology followed in preparing the response and provide the source 
documents which were relied upon, we are not able to conclude that this 
is simply a result of being unfamiliar with the verification process.
    Comment 31: RIMA argues that it used a reasonable methodology to 
report quartz and charcoal costs. RIMA contends that it used its 
financial accounting system to price these inputs because (1) its cost 
system does not use replacement values, and (2) the cost system was 
subject to distortions that were known to RIMA's management. Moreover, 
RIMA argues that the variations between these two cost systems were 
minor, and that RIMA provided the most accurate information in its COP/
CV response that it could.
    RIMA argues that the COP/CV verification report indicates that 
RIMA's production standard specifies the use of specific types of 
charcoal and quartz. However, RIMA, in practice, sometimes used other 
types of these materials, depending on availability. RIMA contends that 
use of these other materials resulted in a lower calculated cost than 
RIMA reported in its COP/CV response.
    Department's Position: We disagree with RIMA's assertions that its 
reported material cost were overstated. As discussed in the cost 
verification report, the monthly replacement costs noted for certain of 
the materials actually used in production were higher than the unit 
costs for the specific materials which RIMA had indicated were used in 
production. Thus these unit prices were understated.
    Comment 32: RIMA asserts that it provided ``critical source 
documentation'' concerning the quantity of inputs used in the 
production of silicon metal, contrary to the assertion of the 
Department's verification report. RIMA contends that during the 
verification it made the ``underlying statistical measurements'' 
available for inspection by the verification team. RIMA argues that it 
should not be expected to produce daily or hourly source documents 
because of the great volume of papers involved.
    Department's Position: We disagree with RIMA's contention that it 
provided source documents. We also disagree with RIMA's assertion that 
we expected the company to provide daily or hourly source documents. 
RIMA was expected to provide an accurate response to the Department's 
specific requests for information. As discussed in the Department's 
verification report (December 22, 1993), prior to verification RIMA 
completely failed to indicate the true nature of its cost and financial 
accounting systems, and even stated that the systems reflect the same 
costs. RIMA also indicated that its cost accounting system was relied 
upon in preparing the submitted cost information. We found each of 
these assertions to be inaccurate.
    Although RIMA was able to provide pages of graphs which purportedly 
reflected the actual material consumption, RIMA was unable to reconcile 
this information to either the cost or financial accounting system. 
Thus, the reported material consumption quantities were presented to 
the Department quite literally in a complete vacuum, merely a handful 
of graphs, unreconcilable to any other recorded measure of material 
consumption. This was the extent of the underlying statistical 
measurements which were made available to the Department for 
inspection.
    As discussed in our response to comment 24, the discrepancies noted 
in the material quantity input together with other significant 
inconsistencies have caused us to reject RIMA's cost submission.
    Comment 33: RIMA argues that it is unfair for the Department to 
penalize the company for having a cost accounting system that does not 
tie to its financial accounting system. RIMA contends that its former 
cost accounting system was not designed to tie into its financial 
accounting system, and argues that rejection of its response is 
equivalent to a penalty for providing accurate data.
    Department's Position: The Department is not penalizing RIMA for 
having any particular type of accounting system. RIMA's cost 
information was rejected for the specific reasons which are outlined in 
the public version of the cost verification report and the calculation 
memorandum. We found that these problems were so extensive that major 
areas of the response could not be tested. For those areas which were 
tested we found significant discrepancies in the amounts reported, in 
addition to a lack of sufficient data to corroborate the response.
    Finally, we are unable to understand RIMA's argument that rejection 
of its response is equivalent to a penalty for providing accurate data. 
The record does not begin to establish that the information provided by 
RIMA is accurate in any way.
    Comment 34: RIMA argues that the Department's COP/CV verification 
report erroneously characterized the reported labor hours as 
``theoretical'' rather than ``actual''. RIMA states that it used its 
statistical process control reports to calculate labor expense, and 
asserts that this constitutes a more accurate way of reporting this 
expense than would have been reflected in RIMA's ``managerial'' costing 
system.
    Department's Position: We disagree that the cost verification 
report provides an erroneous characterization. The Department's cost 
verification report outlines the findings at verification. As the 
report indicates, the analysis upon which the reported labor cost was 
based is no longer performed by RIMA and was never used for any purpose 
other than the company's submission. Based upon the company's inability 
to relate this analysis to any other recorded measure of costs, we 
cannot conclude that the information provided reflected a ``more 
accurate'' measure of the costs.
    Comment 35: RIMA argues that it properly did not report several of 
the home market transactions characterized as ``unreported sales'' in 
the Department's December 20, 1993 sales verification report. RIMA 
contends that commercial samples and intracompany transfers are not 
``sales'' and should not have been reported.
    Department's Position: We agree with RIMA that several of the home 
market transactions which are characterized as unreported sales in our 
December 23, 1993 verification report were in fact commercial samples 
or intracompany transfers. We note, however, that our determination to 
use BIA for RIMA was based upon RIMA's inability to provide reliable 
cost data. The commercial samples and intracompany transfers referenced 
in the December 23, 1993 sales verification report were not factors in 
our decision to use BIA for RIMA.
    Comment 36: RIMA argues that the home market sales that it did not 
report made no difference in the determination of market viability or 
foreign market value.
    Department's Position: As noted in our response to comment 24 we 
used BIA for RIMA because RIMA was unable to provide reliable cost 
data. Thus, the question of whether these unreported sales would have 
made a difference in the determination of foreign market value is moot.
    Addendum
    We have made an additional change in our analysis for these final 
results: We have amended our COP calculations to adjust for the amount 
of the Brazilian inflation that was factored into the home market 
selling price. To make this adjustment, we compared Minasligas's and 
Eletrosilex's selling prices to their respective COPs in effect as of 
the date of payment rather than the date of sale.

Final Results of Review

    As a result of our analysis of the comments received, we determine 
that the following margins exist for the period March 9, 1991 through 
June 30, 1992: 

------------------------------------------------------------------------
                                                                 Margin 
                    Manufacturer/Exporter                      (percent)
------------------------------------------------------------------------
CBCC.........................................................       0   
Minasligas...................................................       0   
Eletrosilex..................................................       0   
RIMA.........................................................      91.06
------------------------------------------------------------------------

    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. Individual differences 
between USP and FMV may vary from the percentages stated above. The 
Department will issue appraisement instructions directly to Customs.
    Furthermore, the following deposit requirements will be effective 
upon publication of these final results of administrative review for 
all shipments of silicon metal from Brazil entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided by Section 751(a)(1) of the Tariff Act, and will remain in 
effect until the final results of the next administrative review: (1) 
The cash deposit rate for the reviewed companies will be those listed 
above, (2) for previously investigated companies not listed above, the 
cash deposit will continue to be the company-specific rate published 
for the most recent period, (3) if the exporter is not a firm covered 
in this review, or the original investigation, but the manufacturer is, 
the cash deposit rate will be the rate established for the most recent 
period for the manufacturer of the merchandise, and (4) the cash 
deposit rate for all other manufacturers or exporters will be the ``all 
others'' rate established in the final notice of the LTFV investigation 
of this case, in accordance with the CIT's decisions in Floral Trade 
Council v. United States, Slip Op. 93-79 (CIT May 25, 1993), and 
Federal Mogul Corporation and Torrington Company v. United States, 
Slip. Op. 93-83 (CIT May 25, 1993). The all others rate is 91.06 
percent. These deposit requirements, when imposed, shall remain in 
effect until publication of the final results of the next 
administrative review.
    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written notification of 
return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
Section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 
353.22 (1993).

    Dated: August 13, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-20455 Filed 8-18-94; 8:45 am]
BILLING CODE 3510-DS-P